Electronic payments that the average person generally makes fall into two different categories that will be herein referred to as proximity payments being of the nature where the recipient is generally present, and remote payments in which the recipient is generally not present and a financial account of the recipient is credited by the remote activation of a suitable communications device.
As regards proximity payments, there have been numerous different proposals and implementations of systems aimed at substantially diminishing the use of hard cash in every-day transactions, particularly, but by no means exclusively, transactions of small or everyday money value, with a view to improving convenience, safety and security and particularly with a view to avoiding the necessity of persons carrying appreciable amounts of hard cash on their person.
Many of these systems involve the use of a smartcard or equivalent electronic memory embodied in a dedicated physical entity (herein referred to as a smartcard irrespective of its actual physical form), often referred to in the industry as an electronic purse or wallet, in which a positive cash balance is retained in an electronic memory for utilization by transferring amounts from time to time to a similar smart card of another person, or to a supplier of goods or services, by interaction of a device with the smartcard or smartcards. This is typically done by inserting the smartcard into a smartcard reader or by making use of a contactless coupling (also referred to as near field communication or NFC).
Smartcards do provide an effective means of storing financial information of a user as well as providing a very high level of security. Unfortunately, one of the serious disadvantages of a smartcard based payment system is the cost and logistical difficulties of making smartcard acquisition and operating infrastructure available. Only if sufficiently wide access to the necessary infrastructure is made available to enable interaction with smartcards is it possible to offer a workable payment system. This has not, as far as applicant is aware, proved to be the case, apparently because of the costs and logistics involved. Also, smartcard systems, as far as applicant is aware, do not provide an adequate record for purposes of comprehensive reconciliation of an account.
As regards remote payments, one solution that has been deployed is to attach a smartcard reader to a personal computer to enable the user to derive some of the benefits of smartcards in interacting with a remote payment system over the Internet, for example.
Many other payment systems that are not based on smartcards have been deployed in which mobile telephones (typically based on SIM cards) are used to access a remote payment system via the mobile telephone network. Even though they do provide appreciable utility, these payment systems suffer from the disadvantage that they do not cater adequately for proximity payments in the manner of a smartcard, as all transactions, large or small, and whether the payment is a proximity or remote payment, need to be routed via the mobile telephone network. Also, off-line payments that may be required from time to time, are not available in the event that the mobile telephone network is unavailable by virtue of fault or unavailability in a particular geographical location.
Accordingly, the payment systems proposed and employed to date are quite expensive to implement in that they require the use of expensive equipment such as smartcard interaction devices, mobile telephones, personal computers, and other costly infrastructure and they also do not satisfy all requirements for both remote and proximity payments.